TAXATION RULING NO. ST 2020

ST 2020

SALES TAX CLEANING CLOTHS CUT FROM SECOND-HAND CLOTHING BY A COMMERCIAL ENTERPRISE

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FOI status:

PREAMBLE

In Taxation Ruling ST 2002 it was stated that manufacture was not involved where a public benevolent institution cut second-hand clothing into sizes suitable for industrial cleaning cloths. The sales tax implications of similar operations carried out by business enterprises have now been considered.

FACTS

2. The production of the cleaning cloths merely involves the sorting of the clothing, the removal of buttons, hooks, zips, etc., the cutting into required sizes and the bundling of the cut material.

RULING

3. The mere cutting up of second-hand clothing into rags of suitable sizes for industrial cleaning is not considered to be manufacture and does not involve any sales tax liability.

COMMISSIONER FOR TAXATION
14 March 1983

References

ATO references:
NO ST 22/68
BO MELB: 6/C3/SC4/3/8 (2)

Date of effect:
Immediate

Related Rulings/Determinations:

ST 2002

Subject References:
CLEANING CLOTHS
SECOND-HAND CLOTHING

Legislative References:
SALES TAX ASSESSMENT ACT (NO.1) SECTION 3